Williams Derry The Rise and Fall of the Asian Coal Bubble...Microsoft PowerPoint - Williams_Derry...
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Photo courtesy Paul Anderson The Rise and Fall of the Asian Coal Bubble Clark Williams-Derry Sightline Institute
Transcript of Williams Derry The Rise and Fall of the Asian Coal Bubble...Microsoft PowerPoint - Williams_Derry...
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Photo courtesy Paul Anderson
The Rise and Fall of the Asian Coal Bubble
Clark Williams-DerrySightline Institute
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$-
$40
$80
$120
$160
2009 2011 2013 2015
New
cast
le, A
ustr
alia
ben
chm
ark
ther
mal
coa
l pric
e (in
flatio
n-ad
just
ed)
June 2016: $53
January 2011: $145
Pacific Rim coal prices spiked......and collapsed
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Importers Exporters
Image source: Google Maps
Western Pacific seaborne coal markets
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When prices were low, US coal exports to Asia didn’t pencil out
Image source: Google MapsImage source: Google Maps
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China’s coal imports skyrocketed in 2009
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The US coal industry made HUGE bets on exports
• June 2011 - Alpha Natural Resources bought Massey Energy for $7.1 billion
• June 2011 - Arch Coal bought International Coal Group for $3.4 Billion
• December 2011 - Peabody Energy bought Macarthur Coal (Australia) for $5.1 Billion
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Massive coal terminal plans in Oregon and Washington
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As prices rose, major exporters ramped up
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Importers Exporters
Image source: Google Maps
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China: “From saving grace to ‘Market from Hell’”
• “De-bottlenecking” in rail and electricity transmission• Coal industry modernization: cutbacks at high-cost mines,
consolidation of production in lower-cost mines• Curtailment of overproduction in cement, glass, steel• Slowdown in economic growth• Economic shifts towards services• Increasing deployment of renewables, especially hydro• Air pollution policies in coastal provinces• Shift away from coal use in homes• Industry, power shifts towards coal-producing regions• Import tariffs• Coal quality restrictions• Etc., etc.
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Chinese coal imports started to fallin mid-2014
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10,000
20,000
30,000
Sep-11 Sep-12 Sep-13 Sep-14 Sep-15
Chi
ese
coal
impo
rts,
thou
sand
met
ric to
ns(1
2-m
onth
rolli
ng a
vera
ge)
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Could A Coal Bubble Re-inflate?
$-
$50
$100
$150
$200
$250
1986 1991 1996 2001 2006 2011 2016
Nw
ecas
tle, A
ustr
alia
ther
mal
coa
l ben
chm
ark
(infla
tion
adju
sted
)
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Thank you!
